What is the argument most used by those who oppose immigration reform? That immigrants take jobs away from natives, but is this idea based on any scientific research or is it just the result of prejudice?
The presentation of the 2021 Nobel prizes brought several surprises, such as three winners in economics who used a novel system of scientific research. Through their research they determined, among other things, that immigrants do not take jobs away from local workers and that raising the minimum wage does not negatively affect the economy.
This year the Royal Swedish Academy of Sciences awarded the Nobel Prize for economics to Canadian David Card, Israeli-American Joshua Angrist, and Dutch-American Guido Imbens for their contribution in the field of “natural experiments.” What does this mean?
For years, the economy has been challenged as a science, as it is very good at diagnosing, but bad at making predictions. One of the problems is the limited field of experimental activity. For instance, you cannot impose one level of inflation on one community and another level on another community in order to evaluate its effects. It would be unethical to experiment with people’s livelihoods.
How did they overcome this obstacle? With the analysis of “natural experiments.” They reviewed specific real-life cases, such as communities affected by a particular phenomenon, then compared them with similar ones to study the impact of different variables. Let’s look at two examples:
Immigrants do not take jobs from local workers
One case that was investigated utilizing this method is David Card’s analysis of the “Great Mariel Boatlift.”
For a brief period in 1980, Fidel Castro’s regime allowed its citizens to leave Cuba and the revolution if they wanted to, without fear of reprisals. Approximately 125,000 Cubans left through the Port of Mariel and settled in the United States, primarily in Miami, Florida.
This city was not anticipating such a large number of refugees, and many expected unemployment rates to skyrocket. Economist David Card studied how Miami absorbed this influx of immigrants and compared the economic indicators with those of other cities that didn’t have a surge of immigrants.
The analysis showed that the wages of the local workers did not decrease with the arrival of the immigrants; in fact, in some cases they even increased. It should be noted that there was one group of people that did see a reduction in wages: first-generation immigrants who were already in the country.
The study concluded that the arrival of so many immigrants was not negative, as it did not raise unemployment or reduce wages. Immigrants and local workers simply adapted to a new economic dynamic.
Increasing wages does not create unemployment
Nobel Prize winners analyzed another case using this method, and they found that raising the minimum wage has minimal negative effects.
In 1992, many employers in New Jersey were outraged over an increase in the minimum wage from ($4.25 to $5.05 an hour). At that time, they argued that companies would not be able to pay their workers, they would go bankrupt, and this would generate unemployment.
Economics Nobel laureate David Card and his late colleague Alan Krueger analyzed the effects of this wage change. They compared it to other places such as Pennsylvania, where the minimum wage was unchanged.
One of their findings was that an increase in wages does not necessarily lead to job destruction, as previously thought.
Anti-immigrants have no arguments
Once again, it has been demonstrated with academic evidence, not conjecture or election speeches, that the country benefits from immigration and wage policies with a social focus.
Those who oppose immigration reform are left without arguments. It is clear that their opposition is not due to economic reasons, but due to racial and populist ones. History will judge them for slowing down the country’s development and for causing the separation of millions of families.